How to manage U.S. Operations as an out-of-country startup

Date : Jan 05 2018

MANAGING U.S. OPERATIONS

DSHG Sonic has been extremely blessed to have worked with a plethora of non-U.S. based startup founders. This has made us realize what support we provide to these founders and support we can provide to more startups across the world who are hoping for a U.S. based setup, but don’t know how to go about it. This blog is just a humble opinion of our advisory team in case you have any plans to establish your presence in the U.S.

IS SETTING UP U.S. OPERATIONS TRICKY FOR NON-U.S. FOUNDERS?

Absolutely not. This can be done very easily when talking about the legal paperwork required to get this completed. There is the State where you want to incorporate, a registrar within the state, an address for the business in the U.S., a bank account for the business and lastly, the Tax Id for the Business. These steps can all be taken care of by a non-U.S. founder, and there are a lot of services that are available for this. The most famous is the Atlas program by Stripe. They can do this all for a nominal fee.

DO I REALLY NEED U.S. OPERATIONS? IF MY PRODUCT IS SAAS BASED CANT I SKIP THIS?

Absolutely not. This can be done very easily when talking about the legal paperwork required to get this completed. There is the State where you want to incorporate, a registrar within the state, an address for the business in the U.S., a bank account for the business and lastly, the Tax Id for the Business.These steps can all be taken care of by a non-U.S. founder, and there are a lot of services that are available for this. The most famous is the Atlas program by Stripe. They can do this all for a nominal fee.

DO I REALLY NEED U.S. OPERATIONS? IF MY PRODUCT IS SAAS BASED CANT I SKIP THIS?

The answer to this question is more nuanced. Can you legally skip this and continue to operate from country of your operation? Yes, it is legal and can be done from most countries, but would you want to do that? The answer is a no. Even if you can, we would suggest you avoid the urge and instead setup your U.S. operations because of intangibles that come into your sales process and can lose you money. Trust is the primary factor if you don’t have a U.S. based entity. Legal Frameworks is another factor as the jurisdiction of the contract will always be shady. Last is stability of the company. It’s a perception if you are opening up a U.S. entity that you are not a ‘fly by the night’ operator and, hopefully, the company will last a few years.

SO LEGAL FRAMEWORK IS DONE NOW HOW DO I BEHAVE LIKE A U.S. ENTITY?

Although being online has removed geographic boundaries, there are still certain roles and activities that are best suited to in-country resources. I see a lot of Asian companies setup U.S. entities and then keep their marketing back in their home country. That’s a big red flag, because all of your marketing collaterals will feel below standard and disjointed since they are not been created with a feel of the culture and ethos of U.S. Most marketers can read digital collateral and make out in seconds whether it was produced within the country or outside. Sales, as a function, should always be handled by people who are available to be meet with clients in person. Online demos and Skype calls can only go so far. At the end of the day, you need to create an in-person relationship with your buyer (I am more focused on B2B sales).

HOW DO I HIRE U.S. BASED SUPERSTARS WITH THE RATE FLUCTUATIONS?

Yes, resources in the U.S. need a dollar based salary. This means because of the exchange rate and the fluctuations you have a variable amount going out each month.This can play havoc with your financial projections and you will need an additional accountant to get these transactions accounted for based on the rules of your country. You also must know if you can afford to have all your functions required to run U.S. operations staffed optimally throughout the year in spite of seasonality of work or demand. Does that put more burdens on trying to predict U.S. seasonality and demand sitting outside?

SO HOW DOES DSHG SONIC HELP IN THIS?

We are a full service advisory and execution firm which will help you create and operate a U.S. based entity for your startup or company
We will behave as the COO of the U.S. operations and perform all tasks on behalf of the parent company in accordance with their plans
We will work on refactoring product and service strategy and execution to be in line with U.S. market expectation
We will benchmark and compare your relaunched U.S. based product or service against U.S. based competitors and provide product recommendations
We will create a robust marketing strategy and execute the same for the U.S. market, keeping in mind your pricing and margin recommendations as well as market positioning
Similarly we will create the Sales playbook and staff the sales team to go after size appropriate leads and companies for better sales ROI
When the company in question is ready to hire full time staff in the U.S., we will transition the marketing and sales execution process to the in-house team
Finally, while we are working together DSHG Sonic will hedge your currency fluctuations and provide a fixed rate of return on your currency for 6 Months or 1 year depending on the size of the deal